Now Performing: Peter Drucker and the Grateful Dead

Peter Drucker and the Grateful Dead each became global legends playing the song of the customer.

The Austrian-born “father of modern management” and the California-bred rockers could not seem more different. But a closer look reveals a kindred commitment. For many businesses, the customer is an elusive “concept”; for Drucker and the Dead, customers are revered as the actual engines of the social exchange called business. The connection between guru and band became obvious as I read David Meerman Scott and Brian Halligan’s book, Marketing Lessons from the Grateful Dead (John Wiley & Sons).

Drucker, a prolific author who died in 2006 at 95, spent the better part of his career telling disciples that there was “only one valid definition of business purpose: to create a customer.” Drucker put the customer at the center of the business universe and constantly reminded his students and his readers that “what the customer buys and considers value is never just a product. It is always a utility, that is, what a product and service does for him.” An original thinker who grasped the elasticity of ideas, Drucker called himself a “social ecologist.”

The Grateful Dead members were similarly original. They stretched themselves as musicians and as marketing pioneers, performing for their Deadheads from 1965 to 1995. “The Beatles were why we turned from a jug band into a rock ‘n’ roll band,” said Dead member Bob Weir. “What we saw them doing was impossibly attractive. I couldn’t think of anything else more worth doing.” This so-called reformed jug band then took an eclectic music style in all-new directions for their fans, introducing such innovations as The Wall of Sound electronic system. As Deadheads still proclaim, the band owned unchallenged bragging rights: There is nothing like a Grateful Dead concert.

“The Grateful Dead is one huge case study in contrarian marketing,” Scott and Halligan write in their quirky, yet strategically solid, marketing text. Today, the authors add, the band “teaches us that business-model innovation is just as important, if not more so, than product innovation.” The Grateful Dead bypassed the sell-albums-first approach to the music “business”; rather, the boys in the band took a page from Drucker, who preached knowing and understanding the customer “so well that the product or service fits him and sells the service.”

Toward that end, Scott and Halligan observe, “the concert-as-business-model worked, and the Dead created a passionate fan base that became an underground cult that catapulted the Grateful Dead into the rock-and-roll stratosphere.”

Peter Drucker and the Grateful Dead sang out of the same hymnal, so to speak, in terms of two primary functions, marketing and innovation. Scott and Halligan chronicle how their favorite band fully appreciated the Deadheads, allowing them to tape performances and working ceaselessly to keep them a part of the product. Jerry Garcia and his fellow musicians were functionally Web 2.0 long before the O’Reilly Media conference played midwife to that expression in 2004.

“Making fans an equal partner in a mutual journey, the Grateful Dead teaches us that our community defines who we are,” Scott and Halligan write. “In an era of instant communication on Twitter, blogs and the like, we learn that companies cannot force a mindset on their customers.”

In his 1974 classic, Management: Tasks, Responsibilities, Practices, Drucker wrote that innovation exists side by side with marketing. “It is not enough for the business to provide just any economic goods and services; it must provide better and more economic ones,” he declared. “It is not necessary for a business to grow bigger; but it is necessary that it constantly grow better.”

I can almost see the Deadheads nodding in agreement.

Anyone with a serious commitment to business success would benefit from reading Marketing Lessons from the Grateful Dead. Who knows? That may lead straight to an encounter with Drucker’s Innovation and Entrepreneurship or The Effective Executive.

Even better—reading a little Drucker with Terrapin Station playing in the background.

J.F. McKenna is a veteran business journalist and communications specialist. Reach him at jf_mckenna@yahoo.com .

I had this book as a Christmas present and found it both enjoyable as a GD fan and interesting as a marketing manager. I would fully endorse the comments in this review. Being English, I couldn’t come anywhere near the number of concerts attended by the authors, although I did manage two dates on the classic Europe 72 tour and the New Year’s Eve 76 Cow Palace concert.